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United Kingdom Bribery Act — 2010 Legal Update

Date

July 16, 2010

AUTHOR(s)

Robert J. Brant
Alexander Strong


On April 8, 2010, the Bribery Bill received Royal Assent and passed into law in the United Kingdom. The Bribery Act 2010 is now expected to come into force in stages between June and October 2010.

This Act replaces the previous common law offences relating to bribery with two general statutory offences of bribing or being bribed. Two other new offences that a company either resident or operating within the United Kingdom must consider are:

  1. the corporate offence of failure to prevent bribery; and
  2. bribery of foreign public officials.

The Act is clear that it is immaterial whether a bribe is paid by a company itself or by a third party acting on its behalf. The company, not the third party, is ultimately accountable.

Failure to prevent bribery

This new corporate offence has a wide jurisdictional reach. It applies to any United Kingdom incorporated entity (or United Kingdom registered partnership) and any overseas entity that carries on a business or part of a business in the United Kingdom. The courts are expected to interpret "part of a business" very broadly.

The only defence available to a company under the Act for the charge of failing to prevent bribery is to ensure that it had in place adequate procedures to prevent bribery. Guidance from the Serious Fraud Office has explained that the term "adequate procedures" does not just include written policies, but evidence that they are acted upon and enshrined throughout the business culture of the company in question. These "adequate procedures" should include:

  1. a corporate policy on anti-bribery and corruption;
  2. active monitoring of third parties to ensure compliance;
  3. the incorporation of anti-bribery and corruption provisions into contracts with third parties; and
  4. internal audits and reporting, as well as many other steps and procedures.

Penalties

The penalties for breaching any provisions of the Act are severe, with conviction carrying up to 10 years’ imprisonment or an unlimited fine (or both) for individuals, and unlimited fines for businesses.

If a business has been convicted under the Act, then it can be debarred from competing for public contracts under the Public Contracts Regulations 2006.

What now?

Given that this new legislation will be coming into force this year, it may be advisable to either review any existing corporate governance policies already in force or approve and enact new specific anti-bribery and corruption policies to ensure that all adequate procedures have been put in place across the business. Doing so may help afford a business the only defence available to a charge of failing to prevent bribery.

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